Correlation Between Corning Incorporated and Data IO

Can any of the company-specific risk be diversified away by investing in both Corning Incorporated and Data IO at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Corning Incorporated and Data IO into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Corning Incorporated and Data IO, you can compare the effects of market volatilities on Corning Incorporated and Data IO and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Corning Incorporated with a short position of Data IO. Check out your portfolio center. Please also check ongoing floating volatility patterns of Corning Incorporated and Data IO.

Diversification Opportunities for Corning Incorporated and Data IO

0.72

Correlation Coefficient

Corning Incorporated  Data IO

Poor diversification

The 3 months correlation between Corning and Data is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Corning Incorporated and Data IO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Data IO and Corning Incorporated is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Corning Incorporated are associated (or correlated) with Data IO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Data IO has no effect on the direction of Corning Incorporated i.e., Corning Incorporated and Data IO go up and down completely randomly.

Pair Corralation between Corning Incorporated and Data IO

Considering the 90-day investment horizon Corning Incorporated is expected to generate 0.77 times more return on investment than Data IO. However, Corning Incorporated is 1.3 times less risky than Data IO. It trades about 0.0 of its potential returns per unit of risk. Data IO is currently generating about -0.05 per unit of risk. If you would invest  4,707  in Corning Incorporated on December 28, 2024 and sell it today you would lose (51.00) from holding Corning Incorporated or give up 1.08% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Corning Incorporated  vs.  Data IO

Corning Incorporated

Risk-Adjusted Performance

Very Weak

Over the last 90 days Corning Incorporated has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable essential indicators, Corning Incorporated is not utilizing all of its potentials. The newest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Data IO

Risk-Adjusted Performance

Very Weak

Over the last 90 days Data IO has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's forward indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Pair Trading with Corning Incorporated and Data IO

The main advantage of trading using opposite Corning Incorporated and Data IO positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Corning Incorporated position performs unexpectedly, Data IO can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Data IO will offset losses from the drop in Data IO's long position.

The idea behind Corning Incorporated and Data IO pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.